Peso hits record low on Trump tariff vow
THE PESO dropped to its record low of P59 per dollar anew on Tuesday after US President-elect Donald J. Trump said he would slap tariffs on imports from Mexico, Canada, and China.
The local unit closed at P59 versus the greenback on Tuesday, weakening by one centavo from its P58.99 finish on Monday, Bankers Association of the Philippines data showed. The peso last finished at its all-time low on Nov. 21, which was the first time it hit the level since Oct. 17, 2022.
The peso opened Tuesday’s session at P58.98 against the dollar. It traded within a tight range, with its intraday best at just P58.95, while its worst showing was its close of P59 versus the greenback.
Dollars exchanged went down to $872.78 million on Tuesday from $1.06 billion on Monday.
The peso slipped on safe-haven demand for the dollar after Mr. Trump said he would impose tariffs on goods from China, Mexico, and Canada, the first trader said by phone.
Mr. Trumps’ tariff threats resulted in a generally stronger dollar on Tuesday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The US dollar rose on Tuesday after Mr. Trump said he would impose tariffs on products coming into the United States from Mexico, Canada and China, as investors braced for polices that could set the stage for a trade war, Reuters reported.
Mr. Trump, who takes office on Jan. 20, 2025, said he would impose a 25% tariff on imports from Canada and Mexico until they clamped down on drugs, particularly fentanyl, and migrants crossing the border, in a move that would appear to violate a free-trade deal.
Mr. Trump also outlined “an additional 10% tariff, above any additional tariffs” on imports from China, in some of his most specific comments on how he will implement his economic agenda since winning the Nov. 5 election on promises to “put America first.”
In an initial knee-jerk reaction to Mr. Trump’s comments, the dollar jumped more than 2% against the Mexican peso and hit a four-and-a-half-year high against its Canadian counterpart.
The US currency also rose to its highest level since July 30 against China’s yuan. Other currencies also fell against the dollar but pared loss by mid-afternoon in Asia.
The dollar index, which measures the US currency against six rivals, was last at 107.04.
For Wednesday, a second trader said the strong dollar could continue to pressure the peso, and profit takers could keep the exchange rate rangebound.
Both the first and second traders see the peso moving between P58.80 and P59 per dollar on Wednesday, while Mr. Ricafort expects it to range from P58.85 to P59. — A.M.C. Sy with Reuters
